BREXIT: We are not there yet!
On 13 November 2018, reports emerged from Brussels and London that a 'deal' had been done between the EU and the UK on Brexit. The exact contents of the deal have not yet been published and A&L Goodbody will publish updates as the contents are revealed. Much turns on what is in the 500 or so page document and but there are some elements which are worth analysing.
The main agreements
It is only the beginning of the beginning rather than the beginning of the end.
This is just the first of the two main agreements to be concluded between the EU and the UK:
- this first deal, the Withdrawal Agreement, is only taking shape a full two and half years, or 873 days, after the Referendum
- the more complex second deal, the Relationship Agreement ("Happy Ever After Agreement") is going to be even more complex and complicated. This is the one which deals with the 'post-backstop' and the 'future relations/trading' issues.
Substantial progress has been made to get the parties to this point. The diplomats should be congratulated because this may well be seen as more of a "diplomat-made" deal than a "politician-crafted" one. Now will it be a case of "Diplomats Make and Politicians Break"? Or "Diplomats Deliberate and Politicians Tolerate"?
For those hoping for further progress on Brexit, the encouraging sign is that if negotiating parties get into the habit of agreeing points, further agreement is more likely.
How will the deal be approved?
This deal has to be approved by (in ascending order of difficulty – with the UK being the most difficult):
Impact on trade
If the UK is to remain in the "Customs Union" then that will mean less disruption for Irish business, particularly those trading globally through the UK. For example, Irish businesses shipping goods to/from the UK for trading with the rest of the world will find less disruption at UK ports.
The draft deal is reported to guarantee that physical checks will not be reintroduced at the border to Northern Ireland should the EU and UK fail to agree a deal on future trading relations. The exact mechanism is specified in the unpublished agreement so a great deal depends on that detail. That detail could potentially derail the deal.
It's not over 'til it's over
There is a lot to be done in the 136 days to go before 11pm (UK time) on Friday night, 29 March 2019 when the UK is scheduled to leave the EU.
The fact that the EU was also publishing plans on the same day for a No Deal Brexit should not be a surprise. The EU was offering no-visa trips to the EU for UK citizens for short stays provided the UK reciprocated. In addition, the EU was also trying to ensure that planes would keep flying. "It's not over 'til it's over" was the message from the EU. This also came at a time when the UK announced statistics showing that there were 132,000 fewer EU nationals working in the UK than a year ago. So not only is the UK leaving the EU but, in some ways, the EU is leaving the UK.
Brexit negotiations are much like comedy – it's a lot about timing. This deal is not good enough for either side but it could be enough for Brexiteers in that they are finally leaving, and not so bad for Remainers who feared that it could be worse. But there is a long way to go before not only 29 March 2019 and the 'real deal' deadline of when the implementation/transition finally ends.
We will be publishing updates on the contents of the draft deal after it is published. No doubt there will be much to write!
For further information, contact Dr Vincent Power, Partner, or any member of the EU, Competition & Procurement team at A&L Goodbody.
Date published: 14 November 2018